Woolworths shares rise on back of solid sales growth

Woolworths posted a 4.8 per cent rise in sales for its key Australian food and liquor business.

AFP: Torsten Blackwood, file photo

Woolworths has increased sales from its continuing stores by 6 per cent, helped by a falling Australian dollar.

One of the retail giant's best sales results for the first-half was a 15.2 per cent rise in New Zealand supermarket sales in Australian dollar terms, reflecting a strong fall in the AUD-NZD exchange rate last year - sales in New Zealand dollars were up a mere 2.6 per cent.

Australia's biggest retailer also benefitted from the falling Australian dollar in its petrol sales figures, with revenue up 8 per cent on rising fuel prices, but litres sold up only 0.6 per cent, and actually down over the second quarter.

Woolworths says its average unleaded petrol selling prices rose to 150.2 cents per litre in the first-half 2014 results, compared with 141.3 cpl the same period a year ago.

Sales growth was more modest than the headline figure in Woolworths' core Australian food and liquor division, which posted 4.8 per cent growth in the 27 weeks to January 5, 2014, compared to the same period a year before.

The supermarket giant pulled in almost $21.5 billion from Australian grocery and liquor shoppers.

"Successful Christmas trading in Australian food and liquor helped to deliver sales growth of 4.8 per cent for the half-year as well as increases in market share, customer numbers, basket size and items sold," Woolworths chief executive Grant O'Brien said in the report.

Mr O'Brien says that increase in sales came despite further price reductions of around 4.1 per cent for the half, when promotions and volumes were included.

However, the retail giant's discount department store Big W struggled in the first-half.

"Trading conditions continue to be challenging with strong competition, ongoing price deflation and increased promotional activity leading to a disappointing 0.2 per cent sales growth for the half," Mr O'Brien added.

Woolworths also highlighted that it had achieved $1 billion in online sales in calendar year 2013.

"Online sales from continuing operations increased more than 40 per cent for the half year and second quarter and featured strong growth within our food and liquor businesses as well as over the Christmas period," Mr O'Brien said.

Woolworths shares were up 1.5 per cent at $34.42 by 11:34am (AEDT), but rival Wesfarmers was up 1.7 per cent and the broader market 0.6 per cent.